The North American work force faces wrenching changes in its
structure and composition that will radically alter how employers
recruit, hire, manage, and hold on to good people.

Some of these changes are demographic. More women, minorities, and
immigrants are entering the work force; the work force is aging, as is
society in North America; and the number of younger, entry-level workers
available is shrinking. Other changes are economic: For example, North
American corporations confront growing competition at home and abroad
from companies with lower labor costs and faster productto-market rates.
This means employers must contain labor costs and produce higher-quality
goods and services with a smaller work force.

What an individual worker can bring to the workplace - in terms of
education, skills, self-reliance, and attitude - is becoming ever more
important in reaching an organization's business goals. Businesses
are recognizing that a worker is a resource and an asset, rather than
merely a fixed cost.

The North American work force has earned its reputation as one of
the most vital and hard-working labor forces in the world. Other
countries envy its education, mobility, and creativity, as they also
admire the U.S. economy's capacity for generating new jobs.
Maintaining this reputation and competing effectively in turbulent times
will require flexibility and the ability to embrace and incorporate
change. The ability of business planners and managers to anticipate
changes and their effects on people in an organization thus becomes
more-critical, and competitive survival may depend on how well planners
and managers can think about the future.

* More than ever before, people are the dominant factor in both
service and production. People plan, invent, design, operate, manage,
and service the large corporation. People are its suppliers and its
customers.

* This increased attention being given to the demand for
more-productive and more-effective workers is stimulating new ideas.
When one thinks of innovation, one tends to think of science and high
technology, such as robots and new ceramics. But now one also thinks of
qualify circles, innovative rewards, and new work arrangements.

* One of the most positive developments is the growing interest on
the part of business organizations in identifying and analyzing trends
shaping the future work force. This interest in the future is a first
step toward planning for work-force needs over the next 10 to 15 years.
Actions taken now that are based on an informed look toward the future
can prepare a company for changes and shifts in its available work force
over time.

* We have identified a number of trends that are likely to
influence the North American work force in the next 15 years. The
potential effect of these trends signals the need for action and
response. Actions can range from merely continuing to monitor the trend
to reviewing policies and creating major shifts in business strategy.
increasing Diversity in the Work Force

The continuing aging of the work force will create problems and
opportunities. The aging of the baby-boom generation is raising the
median age of the U.S. population. The median age, about 33 in 1990,
will be 36 by the year 2000. By 2010, one quarter of the U.S. population
will be at least 55, and one in seven Americans will be at least 65. The
rapid growth of the U.S. labor force has been pushed by the baby boomers
who have now matured into working-age adults. Between 1990 and 2000, the
number of people between 35 and 44 will jump by 16%, and those between
the ages of 45 and 54 will increase by 46%, compared with an overall
expected population growth of 7.1%.

In addition to the baby boomers (people born between 1946 and
1964), three age groups are influencing the shifting structure and
composition of the work force: 1930s Depression babies (1929-1940); the
baby-bust cohort (1965-1978); and the baby-boom echo (1979).

Older Americans will increase in number and grow in influence.
Older people are becoming a larger segment of the population, enjoying
better health and longer life, and wielding economic and political
power. More than 31 million Americans - 12.4% of the nation's
population - are estimated to be 65 or older. By 2020, when baby boomers
reach 65, old people will be 20% of the U.S. population. At that time,
there will be at least 7 million Americans over age 85.

This aging of the U.S. society will have several significant
effects. First, there will be changes in buying habits and consumer
preferences. Second, there will be effects of the work force, such as
aging workers and their productivity, health-care needs, retirement
plans, rehired retirees as a part of the work force, and so on. Third,
society will change with the rise of the four-generation family in which
the older generation is active and economically independent.

Hispanics will be the largest fast-growing minority population in
the United States. Hispanics are changing the face of America. The
Bureau of the Census estimates that the Hispanic population grew from
14.6 million in 1980 to 21.9 million in 1990, about 50% in 10 years.
Hispanic growth is five times that of non-hispanics. By 2010, there will
be 39.5 million U.S. Hispanics. Most U.S. Hispanics live in nine states.
Mexican Americans are mostly in California, Arizona, New Mexico,
Colorado, and Texas. Puerto Ricans are largely in New York, New Jersey,
and Illinois. Cubans are mostly in Florida.

Despite similarity of language, Hispanics are not a homogeneous
group. Several different cultures, drawing on different national bases,
make up the so-called Hispanic culture. But although there may be
cultural differences, most Hispanics in the United States share North
American values, including a desire for upward mobility.

Most black Americans will advance - but not all. In 1987, blacks
accounted for 10.8% of the U.S. work force and about 12.2% of the
population. They will grow to a projected 11.7% of the labor force by
the year 2000. About 70% of black Americans are advancing in nearly
every aspect of American life. In their transition to the mainstream,
they have already moved from the rural South to cities throughout the
country and advanced in large numbers from unskilled and blue-collar
work to white-collar work. They are moving up in corporations and
government, making great educational advances, moving toward closer
income parity with whites, and gaining political and economic power. In
a generation or two, they have risen into the middle class and are
moving to the suburbs. They are part of the mainstream.

Nevertheless, 30% of blacks did not make these transitions after
the great northward migration, which began in the 1920s and accelerated
during and after World War II. They are stuck in a new American social
situation - in urban ghettos, in multigenerational poverty, off the
upwardmobility ladder - and locked into a goalless culture.

Women will move gradually into the executive suite. By sheer force
of their growing numbers in management ranks, women will force open the
door to the executive suite over the next two decades. They will be
counted among the 15 to 25 people in each of the largest corporations
who run the show.

High-achieving Asians are outperforming North American whites in
the classroom and the workplace. For the most part, Asian Americans are
affluent and well educated, but they are a diverse group differentiated
by language, culture, and geography. Seven of the largest Asian groups
in the United States are the Chinese, Filipinos, Japanese, Asian
Indians, Koreans, Vietnamese, and Laotians. By the turn of the century,
the number of Asian Americans will rise to more than 8 million.

Asian Americans are outstanding successful in education. Japanese
males between 25 and 39 have a 96% high-school-completion rate. For
Koreans and Indians, the completion rate is 94%; for Chinese, 90%; and
for Filipinos, 89%. These rates compare with a white rate of 87%. Young
Asian Americans graduating at the top of their class will be well
acculturated and will have high expectations of the workplace and their
prospects in it.

* A shrinking labor pool will create opportunities for
traditionally underemployed workers. A shortage of workers in the United
States - especially entry-level workers and those with specialized
talent - is making many underutilized workers more attractive. These
workers fall into two categories: those of limited skill or ability and
those who are only partially available for work. The first are
underutilized because they lack particular abilities or skills; the
second either are not available to work at preferred times and places or
do not have the desired commitment. Both categories are a substantial
part of the human resource pool. Labor shortages may make workers who
are often considered unemployable or problematic - such as the disabled,
emotionally impaired, or illiterate - more-attractive.

* The scientific and engineering work force is growing and becoming
more diverse in national origin, gender, and race. Nearly 5 million
scientists and engineers were employed in the United States in 1986,
double the number employed in 1976, demonstrating the increasing
importance of science and technology to U.S. society. At the same time,
the scientific and engineering work force is becoming more diverse by
gaining more foreign-born workers, women, and minorities. Women and
black scientists and engineers are still a relatively small part of this
work force, although their numbers are increasing. Universities and
employers who need Ph.D. qualifications find themselves increasingly
dependent on foreign-born workers. Home Life and Work Life

* Corporations will adopt new programs to support employees'
family responsibilities. Although it is currently focused on day care,
the issue of workplace support for employees' family obligations is
indicative of a larger concern for better intergration of home and work
life. Employers, once able to assume that the demands of male
workers' home lives were taken care of by wives and families, are
now being pushed to pay attention to family issues such as day care,
sick children, eldercare, and schooling. One reason why corporations may
lag behind in this trend could be that their older senior managers have
not experienced these pressures in their own lives.

Drivers of this trend include more families in which both husband
and wife work, the dramatic increase in the number of women in the work
force who are mothers, and the growing need for long-term care of the
aging.

* Work and education will influence women's childbearing
choices and will shape national fertility patterns. Of the 50.3 million
employed women in 1987, 59.2% were married and most were in their prime
childbearing and working years. Women are returning to work after
childbearing sooner than ever.

For many women, especially those with more than average education
and with career prospects, there is an economic and opportunity cost for
bearing children that may be limiting their lifetime fertility, as well
as encouraging them to postpone childbearing. Demographers now expect
the average U.S. woman to bear fewer than two children, although she
herself may anticipate having at least two. Many more women win be
childless than had planned to be. While the consequences of these trends
have yet to be fully estimated, one likely outcome is childbearing that
is explicitly planned to coincide with career choices.

* Work will move to unconventional sites and arrangements.
Employers are becoming willing to consider almost any work arrangement
that will get work done at less cost. Businesses are seeking to contain
costs, are responding to the need for flexibility to meet sudden demands
or slowdown in work, and are finding workers with critical skills either
too scarce or too expensive to hire full time. Workers, on the other
hand, find flexible schedules appealing, particularly in terms of
childcare, and are more concerned about such factors as long commutes.
Temporary workers, part-time contractors, and independent workers
constitute the fastest-growing employment category. These workers
accounted for half of the growth in the U.S. work force between 1980 and
1987.

Companies are exploring options such as contingent workers and
flexible scheduling. Contingent workers are paid only for working, may
not qualify for benefits, and are less likely to join labor unions. At
the same time, emerging computer and networking technologies are
enabling work to be done anywhere, at any time, and at any distance from
the office or factory.

* The new focus on workers as an asset will make attitudes and
values more central. Pressed by demands for an adequate return on
investment in the work force, managers are becoming increasingly
concerned about factors shaping their employees' behavior. More is
being invested in training. Expectations of the individual's
productivity, skills, and capacity for responsibility are greater. Yet
at the same time, the work force is increasingly diverse in its
attitudes and lifestyles. It is better educated than ever before and
more acquainted with psychology and sociology.

As a result, researchers are prodding workers and their families
about their values and attitudes toward work, their bosses, and the
workplace. Surveying is becoming a tool for assessing employees'
loyalty and productivity.

* Mobility continues to be a strength of the North American work
force. North Americans, more than others, are ready to pack up and go.
The average American moves every six years - 11 times in a lifetime.
During 1986-1987, 18% of people living in the United States moved to a
different home. Many of these movers moved more than once in a year. A
steady stream of immigrants to North America adds mobility to the work
force. Such mobility is a strength for the future work force: Workers
can move to where the jobs are, acquiring experience and skills in the
process. And a mobile work force means that employers can attract
skilled workers to new sites, making it easier for business to relocate
closer to markets and resources. Globalization: Competing in a World
Economy

* Mergers and acquisitions will continue - with more international
actors involved. Globalization encourages the flow of capital as
barriers to the movement of capital fall. The increase in capital
movement among countries results in mergers and acquisitions, with more
foreign actors involved as nations look for more-productive investments.
Over the long term, as a global economy emerges and structural and
economic differences fade, there is the potential for large
international shifts in corporate ownership and the development of new
organizational structures for doing business internationally.

* Work-force and market demographics in Europe and Asia will
present new opportunities. Birthrates are falling almost everywhere in
the industrialized world. Between 2020 and 2025, the birthrates of
Europe, Asia (including Japan, South Korea, Taiwan, Hong Kong, and
Singapore), and North America are projected to have declined to about
12-14 births per 1,000 population. As the work forces of the
industrially advanced nations of Europe and Asia grow in sophistication,
those countries will grow economically and reap the benefits of world
trade. o Sweeping changes will alter market basics. New stresses on
time, the increasing diversity of lifestyles, the opening up of overseas
markets, and the restructuring of many corporations will shift the
basics of marketing. At the same time, workers at all levels will become
integral to marketing, sales, and customer relations. Broad change will
affect when products and services are marketed (time), what is sold
(quality, experience), how marketing and selling are done (technologies
and new strategies), to whom products and services are marketed and sold
(demographic change and segmentation), and by whom products are marketed
and sold (worker as representative, customer as salesperson).

Several factors are also pushing new approaches to marketing and
sales. These include overseas competition and competition for foreign
markets; changing social values in the United States and other advanced
nations, including new demands for quality and service; and the opening
up of new avenues and new markets through electronic technology, such as
television, fax copying, videotex, home computers, and satellite
transmission. One of the most important of these factors, especially in
the United States, is greater demands on time.

* Worldwide technical and scientific competence will sharpen
competition. Although the United States is the center of scientific and
technical education, has the world's largest technically educated
work force, and holds a sizable share of world trade in high technology,
other countries are catching up. Their efforts are being driven by
several factors: the greater significance of technical education as a
route to economic success; transborder data flows and technical and
scientific exchanges between nations; and new scientific and technical
developments occurring worldwide, including the growth in research and
development. Scientists and the technically educated are becoming the
first truly international, mobile work force. The Changing Nature Of
Work o New critical skills are emerging. Skills critical to the future
of the workplace are emerging, but some are or will be in short supply.
Several factors are driving the shift toward new skills for work:
greater use of information technologies, the move away from craft and
assembly manufacture and toward computer-mediated processes, the larger
amount of knowledge work in almost every occupation, new requirements
for education and the ability to manage complexity, and the redesign of
many jobs to include computerbased work. Frequently, several skills will
be folded into one job, often with a new title and greater individual
responsibility. * Training and education budgets will stay high as
corporations stretch for new results. To boost competitiveness, many
corporations are energetically training and retraining their work
forces. At the same time, more managers and executives are exposed to
new and sometimes eccentric methods and styles of training, aimed at
shaping their behavior toward more-effective leadership and greater
productivity. In the name of leaner, meaner, and moreefficient
management, corporate educators are forging ahead, with no evidence
beyond the promise that these emerging techniques produce longterm
results.

There is, however, a solid base for all the technical training and
retraining that needs to be done in factories and offices. In the next
five years, four out of five people in the industrial world will be
doing jobs differently from the way they have been done in the last 50
years. Most people will have to learn new skills. By the year 2000, 75%
of all employees will need to be retrained in new jobs or taught fresh
skills for their old ones. Corporate trainers, in the interest of saving
time, will explore alternative and faster methods of delivering new
skills and learning, including interactive video, audiotapes, take-home
videodiscs, computer-based instruction, and expert systems. * The
corporation will reach deeper into the educational system to influence
the quality of its supply of workers. At a time when the U. S. work
force as a whole is becoming better educated than ever - one in four
U.S. workers is a college graduate - corporations are troubled by
deficiencies in basic skills among entry-level workers. As a result,
more corporations are teaching reading, writing, and computing to new
hires. More significant, perhaps, are corporations' efforts to
influence the U. S. educational system and thus improve the skills of
their future supply of new workers. To influence the future supply of
workers, corporations are reaching into the educational system with a
variety of incentives, new ideas, and cooperative agreements. In
Minneapolis, for example, corporate contributions underwrote extensive
participatory planning, which was used in the successful restructure of
the city's school system, particularly its inner-city high schools.
In Pekin, Illinois, IBM'S "Writing to Read" program
helped first graders, cutting the number who needed remedial teaching
from 11% to 2%.

* The requirements of the emerging global society are diverging
from the knowledge base of the U.S. population. An emerging globally
integrated society is demanding more knowledge and education. Sweeping
technological change, the rise of worldwide communications, and
competition in the global marketplace require specialized knowledge. The
United States is failing to meet these requirements and struggles to
sustain the literacy, math, and other abilities of previous decades.

* Office automation will thrive despite questionable productivity
gains. Spending on information-processing equipment is rising. Total
fixed-capital investment rose an estimated 8.9% in 1988, to $490
billion; about 70% of this investment was on computers and
telecommunications equipment. However, productivity in some industries
is stagnant or slow to rise, despite increasing capital outlays.

Office automation is driven by the promises of increased
productivity, efficiency, and effectiveness implicit in the technology.
No one doubted that automation would streamline operations and increase
workers' output. The promise, however, has not been fully realized.
The service sector has posted virtually no productive gains despite huge
spending on information-processing equipment. Several factors may be
responsible: Growth in productivity has not been high enough to offset
large capital outlays for computers and related equipment, too little
training is being put behind the hardware, and productivity in
information industries is hard to measure. * Artificial intelligence is
jerkily moving from the laboratory to practical application. Artificial
intelligence (AI) promises a new industrial revolution by the turn of
the century. That revolution may be bigger than the one created by
microprocessing technology. Artificial intelligence mimics the human
mind, and intelligent machines may eventually match humans in speech,
vision, language, communication, and thought. Expert systems are
available today that are the forerunners of AI applications. By the year
2000, AI will affect 60%-90% of all jobs in large organizations; it will
augment, displace, downgrade, or even eliminate workers. AI's
potential for teaching, training, and monitoring will also give us
sophisticated new capabilities. The technology will make autonomous
machines, free of a central control mechanism or wired networks,
practical. Employees and Health

* The United States is an increasingly sedentary society. As the
United States changes into a post-industrial society, the
characteristics of work will change. A feature of this shift is more
indoor working and living. About 60% of American adults live sedentary
fives. Americans are spending 90% of their time indoors, whether at
home, in the office or factory, or in closed spaces during travel. Work
is far more sedentary than in the past. Aside from sleeping, eating, and
dressing, the big consumer of indoor time is watching television six
hours and 59 minutes daily in U. S. households in 19881989.

The trend toward a sedentary society will lead to more exposure to
the risks of an indoor environment, such as indoor air pollution; a
sharp decline in muscular activity; new bad habits associated with a
sedentary life, such as smoking, coffee and soda drinking, and candy
nibbling; and even more social friction and interpersonal annoyances.
Healthy workers lose less time and have fewer accidents. People in good
physical shape five longer and healthier lives. Attention to health at
the workplace also may be seen as an amenity and a factor in morale.

* Strong long-term forces will work against cutting health costs.
The United States spends at least $500 billion a year on health care,
more than 11% of its gross national product. As a percent of GNP,
national health-care expenditures have almost tripled since 1940.
Cost-containment attempts so far have only slightly slowed an inexorable
rise. At the same time, there is no evidence that the quality of health
care, of health maintenance, or of disease prevention is improving to
match the increase in spending.

At least four strong long-term forces are boosting the soaring cost
of health care in the United States and are likely to keep those costs
high. The United States has huge institutionalized health-care
obligations, created by factors such as the aging U.S. population.
Insurance and liability costs in an increasingly litigious society are
enormous. New medical technologies, such as those used for heart and
other organ transplants, have been tremendously expensive. And the
public's expectation of universal entitlement to health care and
health protection continues to grow.

* The significance of the worker's contribution to
occupational health and safety will increase. In the changing workplace,
the worker increasingly is responsible for his or her personal health
and safety, as well as that of fellow workers. The worker can contribute
through awareness of and concern for health and safety or may aggravate
workplace risks by inappropriate behavior or attitudes.

New technologies and new work-styles have shifted occupational
health and safety issues from the acute to the chronic and long term.
There are also new issues (such as mental stress, eyestrain from
computer use, and back fatigue) associated with the white-collar work
force. In the blue-collar work force, averting injury is no longer
strictly a matter of enforcing safety regulations. Greater use of
automation requires more responsibility and cooperation from workers to
ensure safety.

* The AIDS epidemic is killing people in the prime of their working
lives. What makes AIDS uniquely important to business is that those who
are infected and die at present are mostly young men in the prime of
their working years. At the same time, the long incubation period of
AIDS will cause greater distress for individuals and higher medical
costs for employers than any other acute epidemic.

AIDS-related deaths are expected to rise to 68.63 per 100,000 U.S.
population by the end of 1991. Evidence aside, most employers do not
view AIDS as a problem. A Harris executive poll for Business Week showed
little concern among the 1,000 companies surveyed; 89% of the executives
reported that their companies did not have an AIDS policy. Changing and
Restructuring the Way Business Does Business

* Businesses will be increasingly committed to improving
performance through innovation in rewards. Small, medium, and large
firms are exploring innovations in monetary, dollar-equivalent, and
symbolic rewards - such as sabbaticals, mental-health benefits, and
goodwill gestures such as a special concert or other entertaining events
for their workers. These innovations have high potential to stimulate
and motivate workers without raising fixed costs. Both managers and
employees, however, may need some help in thinking of and implementing
any nontraditional rewards. Trade-offs between rewards and compensation,
benefits, amenities, and perks will be common.

* Organizational and work-force restructuring will lead to changes
in compensation. New organizational goals for productivity, cost
control, quality, and work-force restructuring are reshaping
compensation patterns. Corporations are cutting the layers of managers
that separate top executives from other workers. Between 1980 and 1987,
89 of the top 100 U.S. companies reduced their management layers;
analysis of performance appears to show that companies with only seven
layers perform better than those with 11. Compensation for those at the
top, based on the old hierarchy, is rising to new heights, leading many
to doubt that a system that is changing underneath can continue to
support this pattern for long.

Major new directions in compensation include the increasing
popularity of incentive-pay plans in general (long-term plans in
particular) and the use of other cash and noncash methods of
compensation such as employee stock-ownership plans or savings plans -
to substitute for wage increases.

* Competition will promote intrapreneurship and worker empowerment.
Encouraging innovation and intrapreneurship is the new goal of corporate
management. Following the examples of many smaller companies, large
organizations are also experimenting in empowering their workers.
"Empowerment" is a voguish term for giving workers discretion,
authority, and the power of self-management. To some, this is an old
idea - a good business practice with a new name. Driving the recycling
of this idea are the greater use of worker participation as a tool for
generating productivity, information technology that makes information
available at all levels of an organization, and a better-educated work
force, among other factors.

* Downsizing will reshuffle the work-force deck. Begun in the
restructuring of heavy industry, downsizing has continued into the
white-collar work force and now affects the composition of all
industries and companies, in all regions and of all sizes, and affects
employees at all levels of skills and education. The resulting
reshuffling of jobs will create a new business culture in which most
people, as well as having more than one career, will have been laid off
at least once, can expect to be laid off again, and are likely to behave
as if their current jobs are fleeting.

Some believe that most U. S. corporations had hired too many
employees and were suffering from payroll bloat. In any event, by some
estimates at least 600,000 middle managers were laid off between 1984
and 1987. Factors driving downsizing include automation, mergers and
acquisitions, the use of information technology that makes middle
management and some clerical work obsolete, and new management concepts
that call for fewer, cross-skilled workers.

* Pent-up demand for solutions to workplace issues will increase
regulation. Societal problems that are important to the work force -
family support, pay equity, drug abuse, job security, health care, and
labor relations, among others - are not being fully addressed by U.S.
employers or by the federal government. The relative neglect of these
issues in the past decade has created a pent-up demand for new
solutions. In response, state governments and the courts are reversing
the United States' long-term tendency toward managing labor issues
by federal regulation. In the process, they are creating a crazy quilt
of their own regulatory actions and decisions.

* Corporations will be under pressure to explore and redefine their
ethics. Business ethics is a growth enterprise. Frequently cited factors
behind this uprush of interest in ethics include an increase in social
concerns that began with Watergate; stock-market scandals;
sexual-harassment issues; issues of privacy and testing; safety in
products (as, for example, in cigarettes); the quality and integrity of
advertising; and corporate fervor for belt-tightening mergers,
acquisitions, divestitures, and downsizing.

COPYRIGHT 1991 World Future Society
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